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Council on Foreign Relations Special Symposium in honor of David Rockefellerís 90th Birthday

Speaker: James D. Wolfensohn, president, The World Bank
Moderator: Peter G. Peterson, senior chairman, The Blackstone Group; chairman of the board of directors, Council on Foreign Relations
May 23, 2005
Council on Foreign Relations

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Council on Foreign Relations
New York, N.Y

PETER PETERSON: It’s a special pleasure for me to introduce an old friend and a very distinguished member of this organization. As I’m sure most all of you know, Jim was appointed unanimously for a second term at the World Bank, which alas, Jim, ends in approximately 9 days, as I read the calendar. While at the World Bank, he launched a number of major initiatives. I can’t possibly go into all of them. But, Jim, one of the most interesting to me was the program you called the comprehensive development framework. And it’s an extraordinary, interesting initiative and probably one all of us should do more often. Namely, they cataloged the lessons learned in the past about development, and then they instituted new concepts that would take advantage of those lessons. And as I understand it, Jim, it’s now being piloted in about 13 countries, a most interesting effort.

Prior to heading the World Bank, Jim had an extraordinarily successful investment banking firm. It was called James D. Wolfensohn, which seems appropriate somehow. And I was frankly, Jim, extremely pleased for two reasons when you were appointed to the World Bank. The positive sum gain: Blackstone was relieved of some major competition; we were delighted about that. But the country, and indeed the world, gained the services of a very distinguished public servant.

Jim, you’re in the great tradition of American citizens who give up major financial opportunities and live their true passion, which I know in your case is public service. It is my great pleasure to introduce Jim Wolfensohn. This meeting will be on the record. [Applause.] Was that effusive enough?

JAMES WOLFENSOHN: It was effusive enough, yes, thank you. [Laughter.]

Let me first of all thank you, Pete, and thank the Council for having invited me to an event that, personally, I could not refuse. Because the person who had perhaps the greatest influence on my life professionally in this country, and I’m very happy to say personally there afterwards, is David Rockefeller, who first met me at the Harvard Business School in 1957 or ‘58. And I want you to know that, coming from Australia, to meet a Rockefeller was really quite something. It builds my prestige in Australia to no end to be able to say that I’ve met David Rockefeller. But the extraordinary thing about it was not the “bloom in the sky” character of the Rockefeller name. It was the personal character of David and [his wife] Peggy that caused us to both admire and to love them. And I want to say, David, Happy Birthday, and thank you for everything that you did for [my wife] Elaine, for me, and our family in these intervening years.

I looked at what life must have been like in 1915 for David, because I was asked to reflect a little bit on my last 10 years. Since this may well be the last time I ever speak at the Council on Foreign Relations, since I give up my job quite soon. And this is a world when the Council on Foreign Relations did not yet exist. So what a terrible, unguided world it must have been not to have this group of people to guide it. It was a time when the average person, average male, looked out to a life expectancy of 48 years. The average woman: 50. And we’re celebrating today something well in excess of that, and I’m delighted to say, when 1 in 10 of our citizens had finished high school. When looking around the world, more than 60 percent of the people were in absolute poverty, which means that they did not have enough to eat and had no voice and no right to determine their future, and the kids died at an alarming rate. And when one looked forward to a world that had limited sense of direction, but after which we had a world of 1.8 billion people against our group today of 6 billion.

[It was] a world in which China and India had 8 or 9 percent of the global GDP [gross domestic product]. The United States had just overtaken the United Kingdom as the lead country in the world in terms of GDP. And we had no sense at that time, although some expectations, that the industrial revolution would bring the rich world forward at a very rapid pace. And that the 8 or 9 percent of GDP of China and India would drop significantly as a result of many political acts but also growth in population and lack of benefit from the industrial revolution that followed.

It was about 10 or 15 years later that, in fact, as we looked at the world, a family, the Rockefeller family, decided that the issues were not just national for the United States, were not just related to the rich countries. And where, extraordinarily and amazingly, David’s grandfather set up the Rockefeller Foundation, the purpose of which was to take a global view.

First of all, philanthropy was in its infancy. But the notion of setting up an institution where the concern was for mankind and not just for the United States was something that was years ahead of its time. The family also looked at the issue of education. There’s the general education board which they founded and supported. And they addressed the questions, as some of our wealthy philanthropists are doing today, of medicine and of disease, which in those days were malaria, tuberculosis, ring worm. And established in the Rockefeller Foundation, on whose board I served for many years, the great neglected disease program. This year, we celebrated the eradication of tuberculosis, although it has been replaced, sadly, by other diseases including AIDS.

And they also supported the green revolution, which was to bring about the advances that came to most of the poor people in the world who were living in agriculture. So the Rockefeller family, in this last 100 years, has contributed in a way that is quite extraordinary to the development in that period and has given ample focus to the issues of development with which I have been associated. In fact, it’s fair to say that there has been no other single family influence greater than the Rockefeller’s in the whole issue of globalization and in the whole issue of addressing the questions which, in some ways, are still before us today. And for that David, we’re deeply grateful to you and for your own contribution in carrying these forward in the way that you did. And for the fights that [inaudible] in your bank of Chase to try to bring about investment operations in Latin America, Nigeria, and all the things where you were way ahead of your time. And where you put Chase in a situation that could have been decades and decades ahead that perhaps others couldn’t see it as clearly as you did. But we’re very grateful to you, David, for everything that you did in that area.

And so what is the current situation after these 90 years, and what are the issues which I think we all need to face? Well, we’ve now reached the situation where there is an imbalance in our planet—an imbalance in favor of the rich world. Many of you know the numbers. We have a world on the order of 6 billion people, a billion of them in the wealthy countries, 5 billion in the developing countries. The rich countries have 5/6 or 80 percent of the world’s GDP, $28 trillion, give or take, a year ago. The poor world, the developing world, has $7 trillion, but they have 5/6 of the people. And we still have a billion people living [on] under a dollar a day and more than a couple of billion people living under two dollars a day. We have a billion people without clean water. We have 3 billion without sanitation.

It’s a world of great inequity. And it’s a world in which we, in the rich world, have started to become familiar through television, through travel. In the day David was born, it took eight hours to get the news of [Archduke Franz] Ferdinand’s assassination to London. Today, CNN makes sure that happens in milliseconds. And so, we are now brought together in a world which is linked in every possible way, by our environment, by crime, by drugs, by finance, by trade, by terror. It’s now a uniquely connected world in which this institution is deeply involved and provides such leadership in understanding.

But it’s a leadership role in this institution which also is groping for ways of understanding this developing world. Because, although most of us in this room grew up, I think, thinking of ourselves behind a sort of a wall in the rich world and out there was the developing world. Today that perception of development in another world is no longer possible, and it’s no longer possible today as we look at the forces in our planet.

But as we look forward not 90 years, but as we look forward 50 years, we look forward to a world in which there will not be 6 billion but 9 billion people. And of the next 3 billion people, all but 50 million will be in developing countries. That in the year 2050, 2055, or thereabouts, we’ll have a world in which there are 8 billion people in developing countries, still 1 billion plus 50 million in the rich world. And a world in which there will be huge pressures for many reasons.

One, the world that we live in will be older on average, and relative to the world beyond, of course, a smaller proportion. It’s a world that will be challenged by immigration. That will be challenged by economics. That will be challenged by the environment in which we live, as you all know, as pressures build on the environment.

And it will be challenged by economic power. Just on the basis of GDP as it is today, we have a $7 trillion GDP out of roughly 35, it’s actually a couple of trillion dollars more, but roughly 7 out of 35. By 2050, give or take a few trillion, we’ll have a global GDP of $140 trillion. And at that stage, the developing world will be 40 percent, not 20 percent, 40 percent. So we’ll see a growth in the next 45 or 50 years from $7 trillion to $56 trillion. An eight times growth in the developing world compared with maybe two-and-one-half times growth in the rich world.

The power of parity is distinct just from dollar-for-dollar, way, way before that. In the next few years, you’ll find China and India challenging the United States in terms of purchasing-power parity. This is a very, very different world from the world in which we live in or the perspective in which we look at our world. It’s also a world for which, broadly, our kids are unprepared. Very few of our children and very few of us grew up knowing anything about Islam. It’s a billion, two-hundred million people: the fastest growing religion, a very complex, wonderful religion. Very few of us know anything about China and India expect for the odd trip where we marvel at Pudong [area of Shanghai] and what is happening there. And by the way, it was in 1927, I think, David, your first trip. In 1925, I remember from your book, was your first trip to the Middle East, where I’m now going to spend some more time. And these are the places now which are not visited just to take a look, and look at them archeologically. These are huge, powerful economic engines that we have to adjust to, with our lack of understanding of that world, and their lack of understanding of us. The education system in primary schools is deeply flawed in terms of how we’re preparing our kids. As is the education system in many of the developing countries in which all too often, there is education not for knowledge but for hate, which certainly doesn’t help after you have told kids for 10 years how terrible the West is.

So we’re coming into a situation now where there is inevitably a greater imbalance. It’s not a question of opinion. It’s not a question of a World Bank nearly ex-president saying that what he’s done is important or what the bank does is important. It’s there, in fact, that we need to come to look at the next 50 or 90 years in a way wholly different than we looked at the last piece.

It’s not an era of dominance for our world. It’s an era in which there will not only be challenges but there will be dominance on the part of developing countries. By 2017, China and the United States will have the same share of international trade in nominal dollars. A very different situation than it was 10, 15 years ago or even today. And as we see in the markets today, the effect of China and India on the markets is profound. We also have another issue: for many, there’s an understanding that the issue of peace and the issue of stability is tied up with the issue of economics and hope. I will shortly be taking up this role in Gaza and the West Bank in relation to the [Israeli] withdrawal from Gaza and the possible moves towards a road-map solution of two equal states with security and with hope.

I’ve just come back from Gaza, and the situation that you find is one that is very clear. There is an absolute need on the part of Israel to have security; this is clear and essential. And there’s an absolute need for the Palestinians to have hope, to have respect, to have opportunity. And 80 percent [of Palestinians] are under the age of 33. Eighty percent. And there are 60 percent [living in] poverty and 40 to 50 percent unemployment. You have to say that there is no peace possible, whatever is in a treaty, unless you have hope.

And in speaking to my colleagues over there, the issue of security and peace are two sides of the same coin, with peace associated with hope and opportunity. But it is not just Gaza and the West Bank, where at the moment it’s an issue I’m deeply concerned with. It’s everywhere. And we have all too many of the poorest countries involved in conflict. In the last decade, we’ve had over 45 of the poorest countries involved in conflict. Today, in Africa, 23 countries are involved in one sort of conflict or another. When people don’t have hope and don’t have opportunity, they have time on their hands. And if they’re young and they’re frustrated, they want to do something about it. So these are the issues which cannot be ignored by us and which are not now behind the wall that surrounds us. That went [away] on September 11, when all of the sudden we started to learn something about Afghanistan which many didn’t know anything about. Because all of the sudden it was on Wall Street and in Pennsylvania and at the Pentagon.

But we do not need another event like that to make us recognize that the current issues of terror and the current issues of civility are intimately involved in the question of what it is we do about development. And yet, this is a subject that is inadequately treated in our domestic debates. It hardly came up in the presidential debates. When I talked to some of the people involved, they said, it’s not a winner. Certainly the issue of overseas aid is an issue. But it is more than that. It is just that people in our country and in most of the developed world do not see the connection between our future, or our children’s future, and this set of issues. And it is a subject that we must deal with.

We deal with it in the following way: at the moment, the world spends a thousand billion dollars a year on military expenditure. The rich world spends $750 billion a year. Our country spends half of that, somewhere around $400 billion a year. The campaign in Iraq is somewhere over $300 billion. The campaign in Afghanistan is probably $100 billion plus. We talk of helping the developing world by opening markets for trade to them and yet we spend $300 billion a year on agricultural subsidies or on protection. It’s not all subsidies, maybe $100 billion in subsidies and the rest in tariff protection. And then we come down to the very large number of $60 billion for development of which about half goes in cash. If you were just to look at this from another planet, you’d have to say we’re crazy. And yet, that’s the way we’re approaching the issue. And I am very, very sad to say that we need leadership, and we need the promotion of understanding. Not because this is a subject for specialists. But it is a subject; it is the subject for our children. This is the issue of peace. This is the issue of security.

And yet, for most of us, this issue is low on the agenda. It’s the issue for the specialist. It’s the issue for the person that goes off to work in the U.N. program or World Bank program or send some kids off to work in the Peace Corps for a couple of years. It is not at the heart of the issues that we are facing. And yet I come away 10 years after I took this job absolutely convinced that the real issues that we face are, of course, local issues of inequity and of poverty and of all the things that we must face. But they’re local issues. The wave that is encompassing us is much bigger. And that means leadership. It needs the Council to take a more active role. It needs our leaders to take a more active role, because we will not defend against that tide. It’s a tsunami, if you like, of developing countries. And we don’t want to wait until the last minute, until it washes us out to sea.

These are the concerns that I have. It is not that we’ve not made some progress. We have made progress. We’ve increased life expectancy 20 years in the last 40 years. We’ve cut poverty in half from 40 percent to 20 percent of the global population. We’ve improved infant mortality and maternal mortality. We haven’t done a hell of a lot about the environment. And that is a huge and apparently necessary issue. We have made some progress. But the pace of change is such that we truly must redirect our attention to this issue. I say it today, because the Rockefeller family and David, manifestly, have been interested in this issue for more than the last few years. If you go to the Beijing University Medical Center, if you go to many other places that I have had the opportunity of visiting, you have a sense of the foresightedness of this family.

And I think on David’s 90th birthday it would be great if we could give him a present. Within the next 90 years, we will try and carry on, David, many of the things that you did, your father did, your grandfather did. They saw this early. You were and are global citizens, and I think the best present we can give you is to take on that responsibility and push it forward. Thank you all very much. [Applause.]

PETERSON: Jim, I hope that applause is some psychic income for you.

WOLFENSOHN: It is.

PETERSON: To replace the financial income that you’ve lost. OK, the sessions are about the speech itself, and the questions are on the record. And we welcome you. Just to get it started, Jim, this Gaza Middle East job looks like a very important one. Could you give us a little more detail as to how you are going to go about it?

WOLFENSOHN: I’m going to ask David what to do, actually. The job is special envoy for the so-called Quartet, which is the United States, Russia, the European Union, and the United Nations. And the task is to assist on the current withdrawal from Gaza and to try and assist the two parties in reaching agreements and then in carrying them out. [U.S.] General [William] Ward is a three-star general who is concerned with the military aspects. And my concerns are to be engaged in the economic, social, and some political issues.

The answer on how I’m going to go about it is, I don’t know. The one thing I do know [is that] I’m going to listen very carefully over the next month to my friends on both sides of the discussion, and try and form a view of what is already a complex situation and try and see where it is that we can be useful. The one thing I’m certain about is that there will be no Quartet solution, or no Wolfensohn solution. This will be a solution between the Israelis and the Palestinians. And I regard my role as being one in which I can, maybe, help them reach agreement. For that you need to have understanding and trust, and probably a lot of patience. And if you invite me back in six months time—[laughter]— for David’s 90-1/2 birthday, I would be glad to tell you. But at the moment there is not a lot that I can or should say.

PETERSON: I would—[inaudible]—approval, you have such an invitation. OK, questions please. Garrick?

QUESTIONER: Garrick Utley, the Levin Institute. As someone who came out as an investor from the private sector, who has now spent 10 years at the World Bank looking at these development problems, where do you come down on the question as to whether aid itself is the answer, versus those measures which strengthen the market system, and that that’s the solution?

WOLFENSOHN: Well,—[inaudible]—aid alone is not enough, but nor is investment if it doesn’t have the right environment. And, the first thing you need, whether it’s aid or investment, is to have a framework and a country that will be receptive to equitable growth. That means you have to have capacity in the leadership, and not just the president and a cadre of people around, that can run a state. It means that you have a legal and judicial system that is honest, protects rights, contracts, and human rights. You need a financial system that’s not crooked, that deals from micro-credit through to investment assistance. And you need to fight corruption. If you don’t do those four things, aid, investment, and trade, in my judgment, will not succeed. I call these the preconditions to the other ones. And too often they’re ignored, or they’re put to the side, and they say, “Well, we’ll deal with that.” Well, you can’t delay {fighting] corruption, or you can’t delay training people—or let’s delay court reform. You can delay a bit. But if you really want to get things going, you must have those four things.

And that applies in whatever country—it applies in Brazil, it applies in the Congo, it applies in Gaza, it applies everywhere. And too many people forget that unless you have the institutional framework—they think that if you pump money in, that will do it. It won’t, in my judgment.

And that was basically what was agreed at [the 2002 U.N. conference on aid and development in] Monterrey, [Mexico] this after the Millennium summit. And agreed by the African countries themselves in the so-called NEPAD [the New Economic Partnership for Africa’s Development]. This is not something that was forced on anybody by the World Bank or by a Washington consensus. This is what the developing countries themselves said they need to do. And then they said they also need aid, investment, and trade, all of which, by the way, are more likely if you have those things happening beforehand. And I think it’s fair to say that we haven’t done as well as we should on aid. Many countries promise 0.7 of GDP; global average is 0.25 [percent]. We need another $50-100 billion a year.

The second thing is that we have blocked markets to trade. What most countries want is an opportunity to trade themselves out of misery and to have opportunity. And the Doha Round [of World Trade Organization talks], as you know, has not gone tremendously well. And so if you have aid and trade, and then help in capacity building, which has happened—but not as fast or as well as I would have hoped—you can then think about a viable future. The most important thing that has been happening is that the level of overseas investment far exceeds the level of overseas assistance. At its peak in 1997, it reached $300 billion of investing or lending. It’s down a bit now, but even direct investment is probably $140 billion to $150 billion. So it’s probably twice or two and a half times the size of aid already. But it’s narrowly distributed. If you take out China, Brazil, and some of the other countries, you’re left with a rump of 120 countries which are not getting much. And that, I think, is my real worry at the moment. If I can add to the response to your question: I think you need both aid and trade is the simple answer. But my worry is that we’re going to have a three-speed world. We’re going to have a world in which there are the rich countries. They will be doing pretty well, although subject to challenge. We’ll have the middle-income country winners, which will probably be India, China, Brazil, and a few others. And then you have a rump of countries which are really underserved.

And they’ll be underserved because people will say, “Well, you should only lend to countries that are doing well and that have all these conditions.” And there are probably 500 million people in that at the moment, in what we call the low-income countries under stress, but that could easily grow to a billion and a half. And it will vary, because people will say, “Well, let’s not lend to those countries because they haven’t got the preconditions.” So we need to find a way of helping the countries that are lagging catch up and still deal with the question of absolute poverty in those countries on the way through. This is a huge challenge. This is after you’ve done your basic chess openings. This is one of the variations on the basic chess openings, but it’s something that we really do need to deal with. So my answer is that you need both trade and aid. But in order for them to work, you need the preconditions that I spoke about.

PETERSON: Other questions.

QUESTIONER: Thank you. Anne-Marie Slaughter of the Woodrow Wilson School at Princeton. This question builds directly on that one. Building government capacity is the answer to many questions. It’s the answer on the economic side. It’s the answer on the environmental and health side. If we don’t have decent public-health systems in many of these countries, we’re in trouble. It’s also the answer on the security side in terms of being able to actually identify and address threats.

My question is: how do we build capacity? More specifically, how do we institutionalize our ability to build capacity? Can the World Bank do it alone? Or does the World Bank need to be supplemented by a new set of institutions that will allow us to actually work on the ground, country by country, over a long period of time. The World Bank was set up post-1945 when we thought we could do a great deal more, and there was less to do. I’d be interested in your thoughts on how we need, through institution building, to do the job you’re talking about.

WOLFENSOHN: Well, first of all, I think there is no shortage of people of good will in terms of trying to train people. The problem I have is scale. There are many what I call “feel-good projects,” which are done by a plethora of institutions saying we will train ten people here and twenty people there, and so on. It’s China that understood you need 100,000 people studying at any one time in the United States and overseas in order build the cadre, and that you need to do it for decades.

And at the same time you need to build domestic institutions which are as good as or better than anything you’ve got overseas. China has understood this. India, to a lesser degree. Brazil actually is doing reasonably well. Mexico did well. Singapore did well. But Africa has not really solved it yet. I started on this 10 years ago in Africa, and there is a real need in which—I see Vartan Gregorian there, who knows a lot about this—a real need to build the education system. Education is absolutely key. But you can’t just start at the graduate level. We have 113 million kids still out of school. We have a program to get all the kids into school, and we can’t raise the money for it, even the first 15 countries.

I think the first thing I’d say is that it’s not an instant fix. It’s at least a 10-year program. Secondly, there is a need for all the do-good institutions to come together in a more effective way so that we can in fact bring together the collective knowledge and skills. But there is too much turf [conflict] around. If the [World] Bank tries to do it, we get accused of having too much turf. If the U.N. tries to do it, if individual institutions do it—but I think we are now coming to a point where there is a real recognition on the part of most institutions that we’d all be better off if, under the leadership of the country, we could develop sensible programs for a 10-year period. And I see a move now to see that happening. You cannot look at it short term. You have to look at it for a protracted period. And then you run into a problem: the governments change, the parties change, preferences change, sons-in-law change, nephews change. And so you have to be—you really need something which is taken out of the political arena to try and get this done. And we’re seeing it in some countries. But I do believe that there is a lot to be done. We’re doing quite a lot in distance education now, which is starting to work. That’s distance learning, we’re teaching from outside the country. And I think that has some promise.

But the most important thing is the political commitment inside the countries. And I have found that really surprisingly quite difficult to get. And I’ve tried pretty hard. But there are some notable winners. I give you the example of Singapore, Mexico—that’s two—who have for 10 years sent bright people overseas. They trained for a year or two. They came back. They were committed to staying three to five years on the job. If they left the job, they had to pay back the money. Ninety percent of them stayed. And as a result of that, you now have in Mexico and Singapore and Brazil some really good people that have been through much of the training program. That’s the model. And the model is true, by the way, in China.

PETERSON: Any questions? In the back.

QUESTIONER: Good afternoon, sir. Hongmei Shi from Sinovision. My question will be specifically addressed to what you have just mentioned about China. You have already mentioned China’s efforts to build its governmental capacity through education programs. In your opinion, what remains the main challenges for China to better exercise its—[inaudible]—power despite the economic rise in that region, because of some of the political barriers that are still remaining in that country? And also, how does this necessarily affect China’s voice on the global setting, on the political stage?

WOLFENSOHN: Well, I’m not terribly worried about China’s ability to assert itself in the region or globally. [Laughter.] So I don’t have much advice to give you. If I were you, I would just keep doing what you’re doing. It seems to me that China has done a remarkable job in many fields including poverty alleviation and economic development generally. And quite honestly I—you are aware of the problems of size, scale, and diversity in your country, and also the problems of equity, the difference between the rich and the less rich, between the [wealthy cities along the] coast and the rest, all of which, your government is attacking, it seems to me, fairly straightforwardly. So I don’t have much advice to give you. I’ve never run a country of 1.3 bilion people, and I think you guys are doing a pretty good job, especially—[inaudible]—television. That would be my message. [Laughter.]

PETERSON: Over here, please.

QUESTIONER: Robin Duke, Population Action International. Jim, I compliment you on a remarkable speech. I’ve been working in demography and family planning. And one of the things that’s happened in China is—they have very strong policies regarding this issue. What I’d like to know is how you feel the U.N. can do more and maybe a better job in all the areas. They have accomplished a lot, but at the moment they’re having terrible pressure, and they are severely criticized. But in the humanitarian field, the population field, the health field, and a number of other areas they’ve been very credible. How can we reinvigorate the U.N.?

WOLFENSOHN: Well, that’s my next job—[inaudible]. And I’m hoping—I’m hoping that when I finish with Gaza they’ll ask me to do that. I haven’t given it much thought up until now. Look, I think that in many areas the U.N. is significantly underrated. And I think in the area of population, to take just one issue, the Saudi woman who runs it is one of the great treasures of the international community. It’s not adequately funded. And it’s not, I think, adequately taken seriously to the level of its competence generally. But I think the issue of population is a hot political issue, as no one knows better than you in this country. And I think it gets caught up with the overall issues of the review of the United Nations.

My own judgment is that I am a strong and vigorous supporter of [U.N. Secretary General] Kofi Annan. I like him, and I think he has a very, very difficult job today. And I can’t give him any great advice. I just give him support, and that’s as much as I can do. I’ve had enough problems running the [World] Bank. [Laughter.]

QUESTIONER: Laurie Garrett, senior fellow for the Council. I don’t know if it’s a tribute, first of all, to you or to Mr. Rockefeller, but I think this is the first general meeting I’ve ever been at where all but one question were asked by women. So that’s kind of interesting.

I know this is near and dear to your heart, but you did not mention it in your remarks. So, obviously, looking out to 2050 in the world, or 2020: HIV. Most of the burden of infection in the world today has not yet even developed AIDS, much less succumbed. And some of those African countries you’re talking about have up to 40 percent of their populations infected, and without a vaccine or a cure in sight doomed are to die. We’re looking at double-digit infection now in Russia and in some of its neighbor states, and a possibility of a pretty serious one in India and maybe even China. If you put that HIV into your forecast, plug it into those numbers you gave us and the sort of political economy of the world you see, tell me what your vision is?

WOLFENSOHN: Well, there are a number of things that I didn’t mention, because I was so nervous speaking in front of all of you that I forgot everything. One of them was the role of women, first, which I also didn’t mention. And I’m reminded that when David was born, women didn’t have the vote in this country. It was just a few years later when he was in kindergarten that he organized it—[laughter]—for which all the women are very grateful.

But the issue of HIV is a consequential and very different issue—I don’t know that I mentioned it—but when I talked about tuberculosis, malaria, and the other infectious diseases—the AIDS issue is absolutely of a different order. We have 40 million cases, of which four-fifths are probably in sub-Saharan Africa. But we don’t really know the extent of it at this moment in Russia, in Ukraine, in China, in India. And it was very difficult to get the attention of the leaders. I have been trying for nearly 10 years to get the attention of the leaders in those countries. And it is hugely serious. The one thing that has changed in the last several years is the cost of treatment. So when you immediately jump to say, “They will die,” probably we all die sometime, but in terms of prolonging life, current treatments, depending on which cocktail you have—you can do it for $1 a day, or you can do an adequate treatment for something less. And two years ago it was $10,000 a year, which put it beyond anything. So treatment today is a possibility.

The thing that one never understands is the issue of why there is not a more active role in prevention. And I’ve had dozens and dozens of exposures to this issue from [Russian] President [Vladimir] Putin to sex districts in Mumbai. And the issue of talking about this and having leaders go out is still not accepted as adequately as it should be. It is the single most underrated issue, I think, still today. And it seems that a lot of countries have to face a disaster before they do something about it, which is against any rational activity. So it is a big issue. The numbers which I gave you earlier today are all supposed to have taken into account projections on AIDS. And you can get numbers that are slightly bigger, but I have not—I don’t know the number that we’re counting on multiplying the impact. But they are AIDS-adjusted numbers. So I give them to you as AIDS-adjusted numbers.

One other thing that I didn’t touch on, but which I think is a key to this, is the role of youth. Just as women were not enfranchised until recent decades and still constitute the single most important factor in development of which there is very little doubt, the other change that I should have mentioned, and which has the key to AIDS, is the role of youth. A billion eight hundred million people on the planet today are under 14. Two point something—nearly half, two point eight billion people are under the age of 25. My attitude to the young people until four or five years ago was that we were there to look after them and their future—until I started meeting with young groups. And when I had my first meeting in Paris with representatives of some 100 million young people, the leader of them, after I’d made this fairly pompous speech, got up and said, “Mr. President, you talk about us as the future. We’re not the future, we’re the now.” And then he proceeded to give me a lecture about how he was very different than I was at his age, and how his young brother at 12 was very different than he was at 12 because of the exposure that they have to technology and the way in which they’re grasping responsibility, and in which responsibility is being forced on them. And what we’re finding now is that some of our most effective programs on AIDS are carried out by young people. They understand the issues of drugs. They understand the issues of sexual transmission of diseases. They understand the issues of boys and girls very well. So we are finding today that there is a big hope in dealing with the AIDS question at a community level through young people. I’m not claiming victory, but they are the ones that are involved.

And I think that there are some breakthroughs being made in terms of the treatment issue. But the barrier are the older people who don’t want to talk about it. The young people are perfectly easy in talking about sexual activity, and talking about prevention, talking about condoms, talking about all the things that many of still get excited about talking about. So I mean presidents of countries get excited about talking about it.

But I think that there is some hope in this, and I think that the combination of engaging local level youth with less cost treatment may give us a leg up for a short period. But it’s only going to be for a short period if we don’t get national leaders to put it high on the agenda, and we just have to do that.

I was at a Security Council meeting where AIDS was the—the first one was Al Gore, and I spoke of AIDS as a security issue, which I believe it is. And we need to give it greater visibility of that there’s no doubt.

PETERSON: We should have another woman to continue the liberalizing trend? [Laughter.]

QUESTIONER: I just want to continue the tradition of women asking the questions, if this should be the last question. Vishakha Desai of Asia Society. I wanted to follow up on your comments about young people. Also, I was very struck that you mentioned in your remarks as well about education for young people. In much of the work we’ve done at the Asia Society we’ve found that, in this country, young people are least prepared compared to many other countries about knowledge about other parts of the world. As you look out in the future and from your experience at the Bank, are there actually lessons that one might learn about how young people are being prepared elsewhere that we might learn from, which would be a novel idea for this country to actually think that we might learn from somewhere [else]. But I wonder if you have some comments on that, because I do think that it’s a very, very serious issue.

WOLFENSOHN: I think it’s—look, I can give you some examples in many countries of global education. The Ross Institute out on Long Island gives global education to their kids. I didn’t know about it until recently. And I’m very impressed by what they’re doing—hugely impressed. It is a global education which brings education, philosophy, music, everything together in a sort of—but it’s for a few hundred kids. And we had examples in many other countries of a sort of global education. The thing is to get it accepted in an education system which in most countries is delegated down to the locality. And there it’s not understood. And unless you have some curricula needs that speaks to this, which we do not have in this country, then I think we have a problem. One of the things I’m anxious to look at is—and will in some aspects of my future life—how are we going to develop curricula for primary schools, for secondary schools, that can seek to simplify and address some of these issues, so it puts it on the kids’ radar screens, after which they can use their own research capabilities to look at it. And one of my dreams is to try and do that, but not in a special school, in a public school system. Because you need to get—you need to get the breadth in the public school system.

In other countries, part of your problem is that, in some of the Islamic schools, a very small minority, because Islam historically is a religion of great generosity and great openness, as a matter of fact. But in some of the schools in Central Asia, if you talk to the presidents of the countries right throughout Central Asia, some of the overseas-funded madrassas are, in fact, not teaching constructive globalization; they’re seeking exactly the opposite. And this I think constitutes a huge problem when you’re getting the kids from five to 15 and giving them prototypes of all the people that they have to hate and kill. I think there is nothing more important than the educational issue.

And the other thing I’d say is that I think it shouldn’t be just left with kids. I think our television and our media should be doing a hugely more important job in explaining and in presenting issues of global importance. And if the kids come home and they get no help from home, that also hurts. So I think it’s not just getting the kids in primary school, it’s also trying to reach out. And when the Council has its own movie studio, I’m going to come with a script so that we can do that. Thank you all very much.

[Applause.]

PETERSON: Great job. You’ve never been better.

WOLFENSOHN: Thanks, Pete. Thank you very much.

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